NEW ORLEANS, LA–Today, an ordinance that proposes significant reforms to the City’s program for increasing contracting opportunities for disadvantaged businesses enterprises (DBEs) to improve fairness and consistency and strengthen compliance with DBE goals was approved by the City Council’s Economic Development & Special Projects Committee. The ordinance was introduced by the Landrieu administration last week, and will be heard before the full City Council at its June 20th regular meeting.
“For New Orleans’ economy to truly thrive, all of our businesses have to have the opportunity to benefit from public and private investment in our city,” said Mayor Landrieu. “We have worked hard to level the playing field for small and disadvantaged businesses in the last three years. The number of certified DBEs has increased by over 70% since 2010, we are now actively monitoring and improving compliance, and there are strong DBE requirements for the billions of dollars hitting the ground with City, Airport, Sewerage and Water Board, and RTA projects. But we can and must do more.”
He continued, “These reforms will strengthen program reporting and compliance requirements, streamline processes and create penalties for non-compliance. These changes will improve the ability for the City to hold contractors accountable for meeting our DBE goals and will ensure that our economy continues to become more equitable and diverse. It will send a strong signal that we’re serious about compliance.”
District D Councilmember Cynthia Hedge-Morrell said, "Supporting DBEs is about helping our local businesses grow and keeping our tax dollars circulating in our local economy. This has been a goal of mine for several years, and I’m very excited to be the lead author on this legislation."
City Council President Jacquelyn Brechtel Clarkson, chair of the Economic Development & Special Projects Committee, said, "Having been a part of trying to do this for many years, this is the best it's ever been done because it's programmed to sustain."
District B Councilmember LaToya Cantrell said, “I am very proud and excited to support today’s effort to strengthen and expand our city’s DBE program. We’ve talked for a long time about ways to better include disadvantaged entrepreneurs in our city’s economic engine and this new legislative effort is an important step toward getting that done. I look forward to seeing this legislation come to fruition and building a city with financial opportunity for all of its residents.”
District E Councilmember James A. Gray said, “As the son of a contractor, I know that construction jobs put food on the table in many homes throughout New Orleans. This ordinance improves the system in place for DBEs by ensuring that independent contractors get their fair share of the work available.”
The City of New Orleans has an overall 35% DBE participation goal for public contracts, as established by an ordinance passed in 2010. The proposed ordinance maintains the overall 35% goal and improves the program in key areas around accountability and compliance, contract monitoring and goal-setting.
The Administration will propose policy revisions to implement these ordinances and enhance the efforts of the City’s Office of Supplier Diversity, which oversees certification, compliance, training, outreach and capacity building for local, small and disadvantaged businesses in New Orleans. The office was created to help mitigate the effects of past and present social and economic disadvantage and discrimination by increasing the utilization of certified disadvantaged business enterprises in the procurement of goods and services by the City of New Orleans. The office is working actively to increase the numbers of DBE certified firms, and to expand the pool of companies competing for work with the City, and these changes will help those efforts.
Since the Landrieu administration established the Office of Supplier Diversity, the number of certified DBEs has doubled from about 300 to more than 600 local companies in the program. Prior to the Landrieu administration, the City did not track DBE participation or performance. Since tracking began, DBE participation has risen from 16% to 34% in 2012. The City launched Contractors College last year to teach contractors how to improve their businesses in areas such as banking, insurance and bonding, and has graduated 30 firms. The City also has a newsletter that reaches over 3000 small businesses in the area to keep them informed of contracting and networking opportunities in the city.
“To develop these proposals, we looked at national best practices and we listened to both prime and DBE contractors. We were able to find common ground that we believe will create a stronger and more effective DBE program,” said Arkebia Matthews, director of the Office of Supplier Diversity. “These reforms will increase oversight and ensure that our office can position the program for greater success.
The City’s DBE program aims to level the playing field for historically disadvantage businesses and to give companies that are just starting out an opportunity to grow their businesses by working with larger contractors
“This proposal is a major milestone that demonstrates the City’s commitment to inclusion, fairness and accountability,” said Barbara Major, a member of a business advocacy group called The Collaborative. “As we continue rebuilding the community, it’s critically important to make sure our small and marginalized businesses are at the table and have opportunities for public work.
"This administration has taken a strong stance on equity and is not afraid to say the word," said Judith Dangerfield, chair of the Economic Development Advisory Committee. "Access and opportunity are what creates equity, and good leadership makes that happen. I commend the Mayor and the City Council for the work they're doing to close the gap and create opportunities for greater prosperity for the community.
Iam Tucker, CEO of DBE-certified IlSI Engineering, a civil engineering and construction management firm, said “More accountability in the DBE program is encouraging, reassuring and definitely needed. I’m very happy to see the City with an Office of Supplier Diversity that’s proactive and supportive of small, local businesses.
Nathanael K. Scales, President/CEO of DBE-certified Garden Doctors Landscape Architecture Construction Firm. “I commend the City for being committed to these goals and adding teeth to the program that will hold firms more accountable. We've gotten several different projects because of the DBE program, and these projects are helpful for a small local business that’s growing and creating jobs.
Geneva Coleman, owner of the Hawthorne Agency, said “I want to applaud and thank everyone who worked so diligently on this ordinance. Everyone says that the state of our economy rests on the shoulders of small business owners. We just needed a little help to keep these shoulders high.
There have been a number of recent DBE success stories, including Cool Fruit Sensations, owned by Don and Clair Harding, and Colmex Construction LLC, owned by Angelica Rivera and her husband, Roman Lopez.
Don Harding, whose company became a certified DBE in 2012, said, “The essential thing about the City’s DBE program is access and information. We’ve always delivered a good product, were always on time and had everything in order. But for a long time we felt that we were on the outside looking in and missing out on a lot of the opportunities that were available to other businesses,” he said.
“Before becoming a DBE, we were ready to celebrate when we made $300 in a day at the Gretna Farmer’s Market. Now we’ve had the opportunity to work at the French Quarter Festival, we’ve had kiosks at the Convention Center, worked at the Super Bowl and just found out that we’ll be working at the Essence Music Festival. I also feel a responsibility in being a DBE. I don’t want primes to be reluctant about these goals. I want them to think they found a gem with the program and say ‘we never would have heard of these guys without it.’ The program turns on the light and opens the doors, but you have to do the work.”
Since becoming a DBE certified firm in October 2010, Colmex Construction, LLC has grown from six to 15 employees and expanded from only providing construction framing services to fully building and renovating homes from the ground up throughout several New Orleans neighborhoods.
The proposed ordinance will:
Implement specific contract goals for each contract based on the availability of DBEs in the relevant market sector. The ordinance maintains the overall goal of 35% DBE participation, but allows for the goal to be higher or lower as determined on a project-by-project basis;
Establish sanctions for non-compliance for prime and DBE subcontractors that could include termination of contracts with the City. This will allow the City to enforce firm penalties for noncompliance;
Impose restrictions on DBE subcontracting;
Strengthen the City’s Good Faith Efforts policy by establishing clear guidelines and implementing strict parameters of acceptability;
Expand opportunities for the City’s list of certified DBE firms by the New Orleans Redevelopment Authority’s (NORA) commitment to utilize certified DBEs disposing of 25 or more residential properties;
Ensure accountability by tracking DBE goals and attainment rates in reports submitted with annual budget requests;
Expressly recognize the Office of Supplier Diversity’s review of contracts being amended to better ensure the commitment of DBE participation; and
Increase monitoring of and impose restrictions on DBE substitutions.
To ensure all stakeholders have current information about the City’s DBE program policies & procedures, the Office of Supplier Diversity will work with internal and external stakeholders to overhaul the City’s policies related to DBEs to support the proposed ordinance.
For more information about the Office of Supplier Diversity, click here.